Term life insurance provides a stated death benefit for a specific period of time such as 10, 20 or 30 years. Because it covers only an agreed upon time period, term insurance has a lower initial price than policies that offer more permanent protection. However, a lower initial price is not always your long-term best buy. ( See Permanent or Term?)

*Advantages*	*Disadvantages*
Low premiums allow you to buy the most coverage for the smallest possible outlay.	If policy renews after specified period, Premiums increase after
Buy coverage only for the period of time your need it.	Policy designed to cover only a specified time period.
Excellent choice when maximum coverage is needed.	Policy may terminate at end of specified period
Excellent choice when your financial need is a specified period such as a mortgage or to cover a child's growing years.	If renewable, rates will increase as you grow older
Recent price wars have created a buyers market. Bargain rates are available on this site.	If available, renewal rate may be too expensive to continue.
	Conversion privileges are generally limited.
	Minimum flexibility in the future.
	Policy does not generally provide cash values or paid-up options.

Types Of Term - Term insurance comes in several varieties. The classifications below are somewhat arbitrary, but hopefully provide a basis for understanding the different product available to the modern consumer.

Level Term

Level term provides a level face amount for a stated number of years. The premium normally remains level for the entire coverage period, but some policies have a step rate structure where premiums periodically increase. The most common level periods are: 5, 10, 15, 20 and 30.

The search products on this site are all level term. Because of its current popularity, level term usually offers the most competitive pricing. When shopping for level term, please note that rate guarantees can vary greatly from product to product. See Current versus Projected Rates.

Premium rates increase at the end of the guaranteed policy period. These policies have become very popular because of their low cost and the availability of a relatively long term of coverage. Policies require that evidence of insurability be furnished at renewal to qualify for the lowest available rates. It is important to understand the terms of any insurance policy that you are considering before making a purchase.

Caution:

Level term is limited by its very nature. Premium rates may increase dramatically after the level period. Many policies are renewable well into the late 80’s and 90’s, but the rates are so high as to be impractical in all but special circumstances.

Note:

Conversion, is a buyers only viable long term option for level term. If there is any change that coverage will be needed beyond the initial period, careful consideration should be given to the conversion.

Decreasing Term

Decreasing term generally has a level premium and a declining face amount. The face amount decreases, usually annually, according to a specified schedule. The price of decreasing term insurance is hard to compare, because there is such a great variation in the schedule of decreases. Decreasing term is frequently used for mortgage insurance, because the decreasing face amount can be made to match the declining mortgage balance. Theoretically, decreasing term is also a perfect match for family income replacement (As your children grow, your lump sum needs decline), but the popularity of level term has overshadowed this product.

Annual Renewable Term (ART)

Frequently called YRT (Yearly Renewable Term), this term provides a level death benefit, but the premium increase each year. In the past this has been a popular term product, but recently been overshadowed by the prices wars going on in level term products. High rates of replacement caused carriers to increase their pricing on annual renewable term and tipped rates in favor of level term. Most level term products, become YRT after the initial level term period.

Caution:

There are still some good ART products around, that may fit your needs. If you are considering this product, be sure to check the increasing premium schedule. Also, pay special attention to which rates are guaranteed and which are projected. (See Beware of Projected Rates)

These are specialty policies that increase in death benefit over a specified time period. Increases normally occur annually, but these policies can be step rated.

Semi-Term

Part term and part permanent, this product is designed as a low cost solution to long term coverage. Designed with price in mind, this product cuts corners on some of the traditional features of permanent product in an attempt to extend its term-type features well beyond the 30year barrier. Semi-term takes many different forms and is marketed under a variety of trade names. Most have a small cash value component.

Caution: Term life insurnance is the cheapest insurance is your needs are short term. However, if your need insurance for 20 years or longer, it may not be your best buy. Please consult the material contained herein for help in determing what kind of life insuarnce is best for your paticular situation.

Thank You for Visiting!
If You Have Found Our Site of Value,
Please Tell Your Friends and Associates About It